Pakistan’s federal budget for FY2026-27 has been estimated at Rs. 18.771 trillion, with debt servicing remaining the largest expenditure item and accounting for approximately 42 percent of total federal spending.
According to budget documents, the government has allocated Rs. 8.054 trillion for interest payments, highlighting the continued burden of public debt on the national exchequer. The budget has been formulated in line with IMF-backed fiscal targets aimed at reducing the deficit and maintaining a primary surplus.
The federal government has projected a budget deficit of Rs. 7.02 trillion for the upcoming fiscal year. However, a projected provincial surplus of Rs. 1.794 trillion is expected to reduce the consolidated fiscal deficit to Rs. 5.226 trillion.
The Ministry of Finance estimates the overall fiscal deficit at 3.6 percent of GDP in FY2026-27, based on a projected nominal GDP of Rs. 143.604 trillion. The government is also targeting a primary surplus of Rs. 2.828 trillion, equivalent to 2 percent of GDP, in line with commitments under Pakistan’s IMF programme.
On the revenue side, the Federal Board of Revenue (FBR) has been assigned a tax collection target of Rs. 15.264 trillion, while non-tax revenues are projected at Rs. 5.336 trillion, taking gross federal revenues to Rs. 20.6 trillion.
After transferring Rs. 8.848 trillion to provinces under the National Finance Commission (NFC) Award, the federal government’s net revenue receipts are estimated at Rs. 11.751 trillion.
To meet financing requirements, the government plans to raise Rs. 4.012 trillion through treasury bills, Pakistan Investment Bonds (PIBs), and Sukuk instruments. Privatization proceeds are expected to contribute Rs. 161 billion during the fiscal year.
Among other major expenditures, the budget allocates Rs. 3 trillion for defense affairs and services, Rs. 1.169 trillion for pensions, Rs. 1.091 trillion for subsidies, and Rs. 1.071 trillion for civil government operations. An additional Rs. 430 billion has been earmarked for emergencies and contingencies.
The budget reflects the government’s ongoing effort to balance fiscal discipline, development spending, and debt obligations while adhering to IMF-supported economic reform targets.
